Performance Management in Medium-Sized Enterprises

The purpose of this study is to investigate ways in which performance management is practiced in medium-sized enterprises in Sri Lanka. Medium-sized enterprises in Sri Lanka having a total number of employees between 50 to 99, more than seven years of business operation, and total investment between 5 to 50 million Sri Lankan rupees were surveyed. The hypothesized relationships were examined by structural equation modeling. It was found that the six characteristics of performance management (i.e., focus, target setting, administrative work procedures, interdependency, integration with other human resource management functions, and responsibility) significantly predict performance management effectiveness. Although medium-sized enterprises in the sample have devoted considerable energy to implementing performance management practices, considerable improvements are needed in the level of adoption.